The Influence And Transmission Mechanism Of Equity Incentive On Stock Liquidity Of Our Country's Listed Companies

Equity incentive is one of the most popular compensation incentive methods which makes enterprises and their employees become an interest community by granting employees conditional or restricted shareholder rights.The study on effects of stock incentive is mainly separated into two aspects.The first one is based on enterprise valuation index such as business income,company value,governing effect,etc.And the other one is based on the responses of stock market such as expected return and stock liquidity.Among them,the research on the index of company value is more mature.But the study market responses to equity incentives is relatively small and high frequency data are not used for testing.The research on equity incentives and stock liquidity is even less,which needs to be further developed.It is of great significance to study the effect of equity incentive on stock market liquidity and to clarify the effect of equity incentive.It is also an important supplement to the study of corporate governance behavior.Based on the market microscopic theory framework,this paper introduced the relative effective price spread index calculated by high-frequency data,and studied the influence of equity incentive on stock market liquidity at the level of daily market trading and annual company trait.Combined with the impact of equity incentive scheme on the attention of analysts,we formed the transmission mechanism how equity incentive effects liquidity based on securities analysts.First of all,from the perspective of daily trading,using the relative effective price spread index calculated by intraday high frequency data as illiquidity index,this paper studied the effect of equity incentive on stock liquidity.Then,we used the averaged relative effective price spread as the annual illiquidity index,and used DID to study the impact of equity incentive on annual market liquidity.Third,considering analyst as the proxy index of market participants,the paper analyzed the influence of equity incentive on analysts' attention,and finally formed the transmission mechanism of equity incentive's influencing on liquidity based on analysts' attention.Finally,the conclusion and deficiency of the paper were summarized,and the further research directions were pointed out.